So if growth is strong today, but not quite where you want it to be, recommendation #1 is to step it up. Go faster! Go harder! Go into beast mode, into founder mode.
Recommendation #2 is to build a second, bigger product than the first. This always works on paper — if done right. But it’s hard, and it can often feel too late.
So one way to do #2, to get their second big product, is to merge with another start-up, and get that big second product that way. Faster. And Now. Sometimes, merging with a partner. Sometimes, a competitor (this is how ZoomInfo scaled). Sometimes, an adjacent player you can both sell to.
One interesting example from the other day is Harness + Traceable:
Both were co-founded by Jyoti Bansal, founder of AppDynamics, which Cisco bought for $3.7 Billion.
So combining two companies with related cap tables and the same co-founder certainly makes it somewhat easier. Not easy, but somewhat easier.
But the point still holds: by combining, the two together are at $250m ARR growing 50%. That’s plenty to not just power past $1B ARR, but importantly, to IPO with a strong valuation.
Alone, both strong players. But perhaps not quite the full package. And the bar to IPO today is very high. 50% growth at $500m ARR, or close. For a strong IPO.
So to founders out there at $10m-$200m+ ARR with good but perhaps not epic growth, here’s my challenge: think about who you might in theory combine with and see 1+1=3. It’s only worth it if it sums to 3.
But it’s at least worth thinking about.
Who would your top choice be? Maybe just go grab coffee.
